angrysaveruk
Member of DD Central
Back and to the left..
Posts: 1,233 
Likes: 725
|
Post by angrysaveruk on Dec 21, 2017 12:32:09 GMT
I have come to the conclusion that Manual Investment is the way to go with AC. Partly because the provision fund is discretionay and not well defined - so I would rather have the extra investment income - But also because I believe it allows me to take advantage of market imperfections due to the auto investment option many people use on the platform:
1) I can sell loans as they are close to maturity without paying a penalty for the higher default risk associated with these loans.
2) As soon as there are any negative occurrences on the loan I can sell without any penalty
|
|
SteveT
Member of DD Central
Posts: 6,874
Likes: 7,919
|
Post by SteveT on Dec 21, 2017 12:37:22 GMT
I have come to the conclusion that Manual Investment is the way to go with AC. Partly because the provision fund is discretionay and not well defined - so I would rather have the extra investment income - But also because I believe it allows me to take advantage of market imperfections due to the auto investment option many people use on the platform: 1) I can sell loans as they are close to maturity without paying a penalty for the higher default risk associated with these loans. 2) As soon as there are any negative occurrences on the loan I can sell without any penalty 2) only works if you manage to find out about the "negative occurrence" before AC do. Otherwise you're likely to find the loan already suspended from trading and your investment locked in.
|
|
angrysaveruk
Member of DD Central
Back and to the left..
Posts: 1,233
Likes: 725
|
Post by angrysaveruk on Dec 21, 2017 15:31:55 GMT
I have come to the conclusion that Manual Investment is the way to go with AC. Partly because the provision fund is discretionay and not well defined - so I would rather have the extra investment income - But also because I believe it allows me to take advantage of market imperfections due to the auto investment option many people use on the platform: 1) I can sell loans as they are close to maturity without paying a penalty for the higher default risk associated with these loans. 2) As soon as there are any negative occurrences on the loan I can sell without any penalty 2) only works if you manage to find out about the "negative occurrence" before AC do. Otherwise you're likely to find the loan already suspended from trading and your investment locked in. Yes that is true. Although I have seen things posted which are certainly negative information which have not led to a suspension. I have also seen loans suspended then unsuspended allowing me to sell asap.
|
|
